The attached final quick response evaluation presents the results of our review.
The objective of our review was to evaluate the Connecticut Department of Social
Services' (Parent Agency) request for $46,940 in additional funding for Federal
Fiscal Year 2003 indirect costs. The Parent Agency allocates indirect costs
to its components, one of which is the Connecticut Disability Determination
Services, which is funded by the Social Security Administration.

If you wish to discuss the final report, please call me or have your staff
contact Steven L. Schaeffer, Assistant Inspector General for Audit, at (410)
965-9700.

Patrick P. O'Carroll, Jr.

QUICK
RESPONSE EVALUATION

Connecticut
Department of Social Services' Request for Additional Funding

A-15-08-28120

July 2008

Mission

By conducting independent and objective audits, evaluations and investigations,
we inspire public confidence in the integrity and security of SSA's programs
and operations and protect them against fraud, waste and abuse. We provide timely,
useful and reliable information and advice to Administration officials, Congress
and the public.

Authority

The Inspector General Act created independent audit and investigative units,
called the Office of Inspector General (OIG). The mission of the OIG, as spelled
out in the Act, is to:

Conduct and supervise independent and objective audits and investigations
relating to agency programs and operations.
Promote economy, effectiveness, and efficiency within the agency.
Prevent and detect fraud, waste, and abuse in agency programs and operations.
Review and make recommendations regarding existing and proposed legislation
and regulations relating to agency programs and operations.
Keep the agency head and the Congress fully and currently informed of problems
in agency programs and operations.

To ensure objectivity, the IG Act empowers the IG with:

Independence to determine what reviews to perform.
Access to all information necessary for the reviews.
Authority to publish findings and recommendations based on the reviews.

Vision

We strive for continual improvement in SSA's programs, operations and management
by proactively seeking new ways to prevent and deter fraud, waste and abuse.
We commit to integrity and excellence by supporting an environment that provides
a valuable public service while encouraging employee development and retention
and fostering diversity and innovation.

Background
OBJECTIVE

The objective of our review was to evaluate the Connecticut Department of Social
Services' (Parent Agency) request for $46,940 in additional funding for Federal
Fiscal Year (FFY) 2003 indirect costs. The Parent Agency allocates indirect
costs to its components, one of which is the Connecticut Disability Determination
Services
(CT-DDS), which is funded by the Social Security Administration (SSA).

BACKGROUND

On September 7, 2004, we issued a report on Indirect Costs Claimed by the Connecticut
Disability Determination Services (A-15-03-23041). The report recommended that
Connecticut return money to SSA for certain Statewide central service costs
that were erroneously allocated to the CT-DDS in FFY 2003. Specifically, we
excluded (1) the Department of Administrative Services/Bureau of Collection
Services (DAS/BCS) and (2) the Office of the Attorney General (OAG) statewide
central service costs related to the Child Support Enforcement, Title IV D program.

On September 28, 2007, we issued a Follow-up Audit: Indirect Costs for the
Connecticut Disability Determination Services for the Period July 1, 2003 through
June 30, 2005 (A 15-07-16034). This audit found that Connecticut had refunded
the money as recommended in the prior report.

On October 12, 2007, SSA formally notified the Parent Agency that the indirect
cost allocations for FFY 2003 had been finalized. However, on December 17, 2007,
the Parent Agency responded that, based on its books and records, the amount
the Parent Agency had refunded was too high. The Parent Agency requested additional
funding of $46,940 to compensate for the indirect costs to which the Parent
Agency believed it was entitled.

Results of Review
The Parent Agency requested additional funding of $46,940 to compensate for
the indirect costs to which the Parent Agency believed it was entitled as follows.

We found that the Parent Agency did not adjust its books and records for our
prior recommendations to refund indirect costs that were charged to SSA in error.
In our opinion, the request for $46,940 in additional funding represents the
amount of indirect costs that were inappropriately charged to the CT-DDS instead
of the Title IV-D program.

Specifically, we verified that the Parent Agency adjusted the SSA-4513, State
Agency Report of Obligations for SSA Disability Programs, to correct the $46,940
in indirect costs that were previously charged in error. However, the Parent
Agency did not remove $46,940 of indirect costs from the CT-DDS' accounting
books and records.

Matter for Consideration
Based on our evaluation, additional funding for FFY 2003 indirect costs is not
warranted. We brought this to the attention of the Parent Agency and they agreed
with our opinion that no funds were due to or from the Parent Agency for FFY
2003. See Appendix C for the Parent Agency's response.

After we completed our audit of the Federal Fiscal Year (FFY) 2003 indirect
cost allocation for the Connecticut Disability Determination Services (CT-DDS),
the Connecticut Department of Social Services (Parent Agency) requested $46,940
in additional funds. The Social Security Administration (SSA) requested that
we comment on the Parent Agency's request for additional funds. To complete
our objectives, we:

Reviewed Office of Management and Budget Circular A-87, Cost Principles for
State, Local and Indian Tribal Governments, and other instructions pertaining
to administrative costs incurred by the CT-DDS.

Interviewed staff at the Parent Agency.

Reviewed prior SSA Office of the Inspector General reports as follows.

Follow-up Audit: Indirect Costs for the Connecticut Disability Determination
Services for the Period July 1, 2003 through June 30, 2005 (A-15-07-16034),
September 28, 2007.

Reviewed the computation of the indirect costs charged to the CT-DDS. The specific
steps performed consisted of the following.

Determined whether the Statewide Cost Allocation Plan allocation method fairly
and accurately allocated expenses to the CT-DDS for Department of Administrative
Services/Bureau of Collection Services and Office of the Attorney General costs.

Compared the final amount of indirect Department of Administrative Services/Bureau
of Collection Services and Office of the Attorney General cost allocated to
the CT-DDS with our recommended amount, to ensure that all prior refunds were
made.

Reconciled the accounting records to the CT-DDS indirect costs reported on
Form SSA-4513, State Agency Report of Obligations for SSA Disability Programs.

We determined that the computerized data used during our review were sufficiently
reliable given our objective and intended use of the data and should not lead
to incorrect or unintended conclusions. This evaluation was conducted in accordance
with the Quality Standards for Inspections. Our field work was performed at
SSA Headquarters from January to May 2008.

This is a follow up to our telephone conference on March 28th and additional
documentation you forwarded to us to support your conclusion that no funds were
due the DSS as a result of reprocessing the CAP for the March and June quarters
of FFY 2003.

We reviewed the reports that were produced as a result of our reprocessing
the three quarters, March, June and September, 2003. The older CAP files were
archived, and had to be retrieved and re-run to complete our analysis, because
of the time it has taken to finalize these audits. We reprocessed the Cost Allocation
Plans for the QE 03/31/03, QE 06/30/03 and QE 09/30/03 to determine the revised
costs allocated to all state and federal programs.

Our revisions for the QE 03/31/03 and QE 06/30/03 included 100% of OAG/IV-D
costs allocated to the Disability Programs. We assumed that the Comptroller
was going to correct the OAG/IV-D costs through the roll forward adjustment
in SWCAP. Since the SWCAP for SFY 2005 was already final, no roll forward adjustments
for OAG/IV-D could be made for FY 2003. Roll forward adjustments for OAG/IV-D
for FY 2004 and FY 2005 were subsequently made in the SFY 2006 and SFY 2007
SWCAP. We accept your reduction of 65% of OAG costs allocated to the Disability
Programs for the QE 03/31/03 and QE 06/30/03. The reduction was based on the
historical pro rata share of OAG/IV-D costs as compared to the total amount
of OAG costs in the SWCAP calculation. Because these adjustments were not booked
by the Comptroller, we are not able to go back and re-run with actuals and so
have agreed to rely on your estimate.

We also reviewed your reconciliation for the QE 09/30/03. In the process of
pulling the original CAP allocations from archive and re-running the quarter,
we did not adjust SWCAP for the disallowed DAS/BCS costs. We have now re-processed
the September quarter to exclude the DAS/BCS costs and ran Schedule .2 reports
which allocate $401,118 to the DDS rather than the $465,886 used in our calculation.

Because we are unable to capture the actual adjustments for the March and June
quarters, and based on our respective analyses, we agree with your recommendation
that no funds are due to or from the DSS for FFY 2003.

Please let me know if you have any questions or need additional information.

For additional copies of this report, please visit our web site at www.socialsecurity.gov/oig
or contact the Office of the Inspector General's Public Affairs Specialist at
(410) 965-3218. Refer to Common Identification Number A-15-08-28120.

Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of an Office of Audit
(OA), Office of Investigations (OI), Office of the Counsel to the Inspector
General (OCIG), Office of External Relations (OER), and Office of Technology
and Resource Management (OTRM). To ensure compliance with policies and procedures,
internal controls, and professional standards, the OIG also has a comprehensive
Professional Responsibility and Quality Assurance program.

Office of Audit
OA conducts financial and performance audits of the Social Security Administration's
(SSA) programs and operations and makes recommendations to ensure program objectives
are achieved effectively and efficiently. Financial audits assess whether SSA's
financial statements fairly present SSA's financial position, results of operations,
and cash flow. Performance audits review the economy, efficiency, and effectiveness
of SSA's programs and operations. OA also conducts short-term management reviews
and program evaluations on issues of concern to SSA, Congress, and the general
public.

Office of Investigations
OI conducts investigations related to fraud, waste, abuse, and mismanagement
in SSA programs and operations. This includes wrongdoing by applicants, beneficiaries,
contractors, third parties, or SSA employees performing their official duties.
This office serves as liaison to the Department of Justice on all matters relating
to the investigation of SSA programs and personnel. OI also conducts joint investigations
with other Federal, State, and local law enforcement agencies.

Office of the Counsel to the Inspector General
OCIG provides independent legal advice and counsel to the IG on various matters,
including statutes, regulations, legislation, and policy directives. OCIG also
advises the IG on investigative procedures and techniques, as well as on legal
implications and conclusions to be drawn from audit and investigative material.
Also, OCIG administers the Civil Monetary Penalty program.

Office of External Relations
OER manages OIG's external and public affairs programs, and serves as the principal
advisor on news releases and in providing information to the various news reporting
services. OER develops OIG's media and public information policies, directs
OIG's external and public affairs programs, and serves as the primary contact
for those seeking information about OIG. OER prepares OIG publications, speeches,
and presentations to internal and external organizations, and responds to Congressional
correspondence.

Office of Technology and Resource Management
OTRM supports OIG by providing information management and systems security.
OTRM also coordinates OIG's budget, procurement, telecommunications, facilities,
and human resources. In addition, OTRM is the focal point for OIG's strategic
planning function, and the development and monitoring of performance measures.
In addition, OTRM receives and assigns for action allegations of criminal and
administrative violations of Social Security laws, identifies fugitives receiving
benefit payments from SSA, and provides technological assistance to investigations.